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MGTA01H3 (583)
Chapter 5

MGTA03 Chapter 5 lecture notes

2 Pages
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Department
Management (MGT)
Course Code
MGTA01H3
Professor
Chris Bovaird

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Chapter 5 - International Business
Globalization - The integration of markets globally
Imports - Products made or grown abroad and sold domestically
Exports - Products made or grown domestically and sold abroad
Per Capita Income - the average income per person of a country
- High income countries: >$10,065
- Upper-middle income countries: $3255 - $10,065
- Low-middle income countries: $825 - $3255
- Low income countries: <$825
Major world marketplaces
- North America
- General Motors, Bombardier, Nortel Networks etc
- Europe
- Unilever, Renault, Michelin, Nestle
- Asia-Pacific
- Toyota, Toshiba, Nippon Steel.
Forms of Competitive advantage
- Absolute Advantage-a nation's ability to produce something more cheaply or better than any other country
- Comparative Advantage-a nation's ability to produce some products more cheaply or better that others can
- National Competitive Advantage
- A country will be inclined to engage in international trade when:......... are favourable
- Factor of production conditions
- Demand Conditions - large domestic consumer base
- Related and supporting industries -strong local/regional support and/or industrial customers
- Strategies, structures, and rivalries - stressing cost reduction, quality, productivity etc
International Competitiveness - The ability of a country to generate more wealth than its competitors
Balance of Trade - The difference in value between a country's total exports and its total imports
- Trade Surplus - Occurs when a country exports more than it imports
- Trade Deficit - Occurs when a country imports more than it exports
Balance of Payments - The difference between money flowing in to and out of a country as a result of trade and
other transactions
Exchange Rates - The ratio of one currency to another.
Euro - A common currency shared among most of the members of the European Union
- Excludes: Denmark, Sweden, and the United Kingdom
International Organizational Structures:
Independent Agents:
- A foreign individual, or organization, who agrees to represent an exporter's interests in foreign markets
Licensing Arrangements
- An arrangement by an owner of a process or product to allow another business to produce, distriute, or
market it for a fee or royalty.
Branch Offices
- A location that exporting firm establishes in a foreign country in order to sell its products more effectively
Strategic Alliances
- An enterprise in which two or more persons or companies temporarily join forces to undertake a particular
project
Foreign Direct Investment (FDI)
- Buying or establishing tangible assets in another country
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Description
Chapter 5 - International Business Globalization - The integration of markets globally Imports - Products made or grown abroad and sold domestically Exports - Products made or grown domestically and sold abroad Per Capita Income - the average income per person of a country - High income countries: >$10,065 - Upper-middle income countries: $3255 - $10,065 - Low-middle income countries: $825 - $3255 - Low income countries:
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